The Swiss watch industry, a cornerstone of the country’s economy, is facing its first employment downturn since the post-Covid era, and it’s a wake-up call for anyone who thinks luxury goods are recession-proof. But here’s where it gets controversial: while government programs have temporarily cushioned the blow, the industry’s reliance on these measures may not be sustainable in the long run. Could this be the beginning of a deeper shift in the global luxury market? Let’s dive in.
The Swiss watch sector, which employs around 65,000 people and ranks among the top five export industries, is under pressure. About a quarter of its companies have turned to the country’s ‘short-time work’ (RTH) program, a government initiative that allows employers to reduce staff hours without resorting to permanent layoffs. This program, extended from 18 to 24 months, has been a lifeline, according to the Convention Patronale (CP), helping preserve jobs and the industry’s renowned craftsmanship. However, the CP warns that if economic challenges persist or worsen, 2026 could be even tougher. And this is the part most people miss: the phasing out of RTH schemes could force some companies to downsize, despite their best efforts to adapt to a volatile economy.
So, what’s driving this downturn? Global events are playing a significant role. Armed conflicts in the Middle East and Ukraine, coupled with slowing economic growth in Europe and China, have dampened demand for Swiss-made watches in key regions. Meanwhile, fluctuating tariffs on Swiss goods imported into the U.S.—the largest single market for Swiss watches, accounting for nearly 20% of exports—disrupted trade flows in 2025. While a November agreement reduced tariffs from 39% to 15%, Swiss watch exports still declined by 1.6% year-to-date, reaching CHF 21.2 billion by October.
To put this in perspective, the last annual decline in Swiss watch industry jobs was in 2021, a direct response to the Covid-19 pandemic’s store closures and trade disruptions. The industry rebounded sharply as demand surged, with secondary market prices for popular models hitting record highs before stabilizing. However, the 2009 Global Financial Crisis, triggered by the subprime mortgage collapse, had a far more devastating impact, slashing employment by nearly 8%—over 4,000 jobs. Since then, the industry has created approximately 15,000 new positions, but the current challenges raise questions about its resilience.
Here’s the bold question: Is the Swiss watch industry’s current struggle a temporary hiccup or a sign of deeper structural issues in the luxury market? With economic pressures mounting and global uncertainties looming, the industry’s ability to adapt will be tested like never before. What do you think? Is this downturn a passing phase, or is the luxury watch market due for a transformation? Share your thoughts in the comments—let’s spark a conversation!
